Question
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Farmer Company issues $25,000,000 of 10-year, 9% bonds on March 31, 2014 at 97 plus accrued...
Farmer Company issues $25,000,000 of 10-year, 9% bonds on March 31, 2014 at 97 plus accrued interest. The bonds are dated January 1, 2014, and pay interest on June 30 and December 31. What is the total cash received on the issue date?
Solutions
Expert Solution
--Issue price = $ 25,000,000 x 97/100 = $ 24,250,000
--Accrued Interest for 3 months (1 Jan to 31 Mar) = $ 25,000,000 x
9% x 3/12 = $ 562,500
--Total Cash received = $ 24250000 + 562500 = $ 24,812,500 = Answer
ekkarill92 answered 2 years agoRelated Solutions
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Optional Work Area
Face, Price, Carry Value >
2,000,000
97
1,940,000
Bond Rate>
9%
Discount/Premium>
60,000
#
Periods >
4
JE #5: Redeem Bonds @ 101 on Jan 1st year #2 assuming Bond
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(1)
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(3)
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(4)
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